DMHC Press Release

October 12, 2023 Press Release


Thursday, October 12, 2023


DMHC, Kaiser Permanente Reach Settlement Agreement to Transform Plan’s Behavioral Health Care Delivery System and Improve Behavioral Health Statewide

Plan Subject to $200 Million Enforcement Action, Required to Take Corrective Action to Protect Enrollee Health Care Rights

(Sacramento) - The California Department of Managed Health Care (DMHC) today announced a settlement agreement with Kaiser Foundation Health Plan, Inc. (Kaiser Permanente) to make significant changes to the plan’s delivery of behavioral health care services. The settlement agreement includes a $50 million fine and requires Kaiser Permanente to take corrective action to address deficiencies in the plan’s delivery and oversight of behavioral health care to enrollees. Kaiser Permanente has also pledged to make additional significant investments, totaling $150 million over 5 years, into programs to improve the delivery of behavioral health services for all Californians beyond Kaiser Permanente’s existing obligations to its members under the law.

“With this historic agreement, Kaiser Permanente will undertake a systemic overhaul and transformational change of the plan’s behavioral health care delivery system to improve enrollee experiences, access to care and treatment outcomes. I appreciate Kaiser working proactively and in good faith to reach this agreement for the benefit of its members,” said DMHC Director Mary Watanabe. “In addition to paying the highest fine the DMHC has ever levied against a health plan, Kaiser Permanente has agreed to make significant improvements to the plan’s operations, processes and procedures and business model to better assist enrollees with accessing care. The DMHC is committed to using its full authority to hold Kaiser accountable and ensure enrollees have access to behavioral health care when they need it.”

SETTLEMENT AGREEMENT: The agreement relates to two regulatory actions by the DMHC, first, an enforcement investigation, and second, a non-routine survey. Collectively, these identified several violations and deficiencies in the plan’s provision of behavioral health care services to enrollees including issues identified in providing timely access to care, oversight of the plan’s providers and medical groups, network adequacy, conformity to mental health parity, and grievances and appeals, among many other issues.

The DMHC’s actions found Kaiser Permanente canceled behavioral health appointments and, in many cases, did not provide enrollees with behavioral health appointments that met timely access and clinical standards that were still required regardless of a strike by mental health clinicians that was initiated in August of 2022. In addition to the length of time enrollees had to wait to get appointments, the DMHC’s actions found violations in the plan’s behavioral health care delivery system including a shortage of contracted high-level behavioral health care facilities in the plan’s network, inadequate oversight of the plan’s medical groups in evaluating appropriate care, not making out-of-network referrals consistent with requirements under the law when in-network providers are not available, and inadequate handling of enrollee grievances.  

Under the settlement agreement, Kaiser Permanente will hire an outside consultant to focus on corrective actions to help ensure enrollees receive timely access to medically necessary behavioral health care services. The consultant will provide expert guidance and aid Kaiser Permanente’s Behavioral Health Quality Assurance program in ensuring that effective action is taken to improve care where deficiencies are identified in service areas, including accessibility, availability, and continuity of care. The settlement agreement outlines the required corrective actions that Kaiser Permanente is required to implement, in consultation with the consultant, including the following:

  • Oversight: Kaiser Permanente must improve its Quality Assurance Program, including continuous performance review and enhanced oversight of the Plan’s medical groups and external contracted providers to ensure timely access, network adequacy, continuity of care, level of care, and quality of care. Kaiser Permanente must also implement policies and procedures for intervention whenever necessary, including, for example, if the medical groups are unable to ensure that behavioral health care services are reasonably available to enrollees.
  • Access: Kaiser Permanente must improve its procedures to ensure that its enrollees can access behavioral health appointments consistent with timely access standards. The Plan must provide a clearly defined and fully implemented policy and process to be uniformly applied across all of the Plan’s medical groups, medical group providers, and external contracted providers, to ensure that initial, follow-up, and rescheduled behavioral health appointment access complies with the timely access requirements, and is consistent with each enrollee’s treatment plan, individualized behavioral health care needs, and the clinical criteria stated in the law. The policy and process shall further ensure that enrollees are provided with timely behavioral health services that are based on individualized determinations of medical necessity.
  • Network & Referrals: Kaiser Permanente must improve the ability of its enrollees to access the Plan’s network of providers, including external contracted providers, for behavioral health services, and improve the ability of its enrollees to access out-of-network providers for behavioral health services in instances where the Plan’s network of providers cannot offer enrollees timely care.
  • Grievance and Appeals: Kaiser Permanente must improve its grievance and appeals policies and procedures to include making sure enrollee grievances are acknowledged, adequately considered, and responded to within the timeframes required under the law. Additionally, the plan shall develop a process through which all enrollee grievances regarding a delay or difficulty in obtaining a timely behavioral health appointment are routed to grievance coordinators specially trained on the laws and requirements around timely access to care.
  • Mental Health Parity: Kaiser Permanente must develop processes to ensure compliance with all behavioral health parity laws. This includes ensuring that enrollees receive appropriate treatment based on individualized determinations of clinical appropriateness, and regardless of the type or severity of the enrollees’ behavioral health conditions.

REAL IMPACT FOR PEOPLE: This settlement will mean Californians with Kaiser will have full access to the behavioral health care services they are entitled to under California law. California law says that enrollees must be offered a first mental health or substance use disorder treatment or support appointment within 10 business days of request, and a follow up appointment, if needed, within 10 business days of the prior appointment.

BACKGROUND: The DMHC opened a non-routine survey of Kaiser Permanente in May of 2022 to review the plan’s broader compliance with providing timely behavioral health appointments to enrollees. A non-routine survey is an investigatory survey when the DMHC has good cause to investigate issues of compliance with the law. The non-routine survey is examining Kaiser Permanente’s behavioral health operations, including but not limited to the Plan’s internal and external provider networks, timely access to care, processes for intake and follow-up appointments, appointment scheduling processes, levels of care and associated decision-making processes, medical record documentation and retention practices, and monitoring of urgent appointments. The DMHC Help Center saw a 20% increase in behavioral health complaints for Kaiser Permanente in 2021 compared to 2020, which is part of what prompted the DMHC to open the non-routine survey of the plan.

The DMHC’s non-routine survey is ongoing. Any deficiencies identified in the non-routine survey final report that are not addressed as part of the corrective actions outlined in the settlement agreement, shall be addressed by Kaiser Permanente through a modified Corrective Action Work Plan subject to the DMHC’s approval.

The DMHC also opened a targeted enforcement investigation on August 22, 2022 to examine if Kaiser Permanente was providing timely access to appointments during a behavioral health care worker strike that started on August 15, 2022 in Northern California. State law requires health plans provide enrollees with medically necessary care within timely access and clinical standards at all times, including during a strike.

WHAT ENROLLEES CAN DO: Health plans must ensure their network of providers, including doctors and non-physician behavioral health providers, can provide enrollees with an appointment within timely access standards. A qualified health care provider may extend the waiting time for an appointment if they determine a longer waiting time will not be harmful to the enrollee’s health. If an enrollee cannot get a timely appointment in their area because there are not enough providers, their health plan must help the enrollee get an appointment with an appropriate provider.

The DMHC encourages health plan enrollees experiencing issues with accessing care to first contact their health plan. If the enrollee is not satisfied with their health plan's response, the DMHC Help Center can work with the enrollee and health plan to resolve the issue. The health plan enrollee can contact the DMHC Help Center at or 1-888-466-2219.


About DMHC:

The California Department of Managed Health Care (DMHC) protects the health care rights of 29.7 million Californians and ensures a stable health care delivery system. The DMHC Help Center has assisted 2.8 million Californians to resolve complaints and issues with their health plan. The DMHC Help Center provides assistance in all languages and all services are free. For more information visit or call 1-888-466-2219.